Michael Hendricks
Burkhard Fassbach

As I discussed in a blog post at the time, in June 2021 VW announced that a settlement had been reached in the D&O liability action that had been filed against the company’s executives in connection with the “Dieselgate” scandal. The settlement, which had an aggregate value of approximately $351 million, was approved by VW shareholders in July 2021. However, minority shareholders have now filed a legal action against VW in an effort to oppose the settlement. In the following guest post, Michael Hendricks and Burkhard Fassbach review the minority shareholders’ legal action and discuss its implications. Michael is the founder of the German D&O specialist broker hendricks GmbH and Burkhard is a D&O-lawyer in private practice in Germany. I would like to thank Michael and Burkhard for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Michael and Burkhard’s article. Continue Reading Guest Post: VW Dieselgate: Minority Shareholders File Suit Against D&O Settlement

By almost any measure, Fiscal Year 2021 (ended September 30, 2021) was a watershed year in the history of the SEC’s Whistleblower program. According to the recently published annual report of the SEC’s Whistleblower Office, during FY 2021 the agency made the highest annual number of awards in the history of the program, both in terms of dollars and individuals awarded. Indeed, during FY 2021 the agency made more whistleblower awards than in all of the program’s prior years combined. The SEC’s Office of the Whistleblower’s November 15, 2021 Report to Congress can be found here. Continue Reading Record-Setting Year for SEC Whistleblower Program

In a post last week, I noted that in FY 2021 the SEC had flied fewer enforcement actions against public companies compared to FY 2020. However, according to the SEC’s recently released fiscal year end enforcement activity report, the number of new enforcement actions overall (that is, inclusive of both public and private companies) increased by 7 percent in FY 2021. The SEC’s November 15, 2021 press release detailing the agency’s enforcement statistics can be found here. The enforcement action statistical breakdown for FY 2021 can be found here. Continue Reading New SEC Enforcement Actions Overall Increased in FY 2021

As I have noted in prior posts (most recently here), since the outbreak of the coronavirus in the U.S. last March plaintiff shareholders have filed numerous COVID-19-related securities class action lawsuits. Relatively few of these cases have reached the motion to dismiss stage, but the few dismissal motion results so far are decidedly mixed, at best, from the plaintiffs’ perspective. In the latest of these cases to fail to survive the initial pleading hurdle, the court in the COVID-19-related securities suit against biopharma firm Sorrento Therapeutics has granted the defendants’ motion to dismiss, albeit with leave to amend. The court’s November 18, 2021 order can be found here. Continue Reading COVID-19-Related Securities Suit Against Biophama Company Dismissed

In recent posts (here and here), I have discussed new lawsuits that represent interesting new variants of coronavirus-related securities class action claims; these new kinds of suits involve defendant companies whose fortunes had prospered at the outset of the pandemic but that later saw their financial performance  decline after the initial surge eased. In the latest example of this new variant on the pandemic-related securities litigation theme, a plaintiff shareholder has filed a securities lawsuit against computer networking firm, Citrix Systems. The complaint alleges that the company misled investors about the company’s ability to initial short-term business success as the pandemic evolved. A copy of the plaintiff’s November 19, 2021 complaint can be found here. Continue Reading Shareholder Files New Pandemic-Related Litigation Variant Suit Against Citrix Systems

In the surge of SPAC-related litigation that has been filed this year, one of the distinctive features of the filings has been that many of the lawsuits have followed shortly after a short seller published a report critical of the defendant company. In the latest example of this phenomenon, a shareholder has filed a securities class action lawsuit against biotech firm Ginkgo Bioworks Holdings, which merged with a SPAC in September 2021, after the company’s share price declined following the publication of a negative short seller report. As discussed below, this new lawsuit has several other features in common with the SPAC-related securities lawsuits filed this year. A copy of the November 18, 2021 complaint against Ginkgo Bioworks can be found here. Continue Reading Shareholders Sue Post-SPAC-Merger Biotech Firm After Short Seller Attack

With the passage of time, the impact of the pandemic on business and commerce has evolved, both at the level of the economy as a whole and at the company-specific level. Companies that suffered early in the outbreak are now returning to form, while companies that prospered due to pandemic-related conditions are now returning to earth. One company that unquestionably flourished at the outbreak of the pandemic is home exercise equipment company, Peloton Interactive. The company’s share price has recently declined as the company has experienced declining demand for its products and services.   A new COVID-related securities lawsuit has now been filed against the company, based on allegations pertaining to the company’s alleged misrepresentations about the company’s ability to sustain its pandemic-related sales boost. A copy of the November 18, 2021 related securities suit can be found here. Continue Reading Shareholder Sues Peloton in COVID-Related Securities Suit

Increased stakeholder expectations have made corporate governance more important than ever, with important implications for companies and their executives. The following guest post examines the ways that sound corporate governance structures and practices can help position companies to be able to defend themselves in the event of litigation. This paper was written by Suzanne H. Gilbert is a member of the Board of Advisors of Grace & Co. Consultancy, Inc.; H. Stephen Grace Jr., Ph.D. President of H.S. Grace & Company, Inc.; Joseph P. Monteleone, a partner with Weber Gallagher Simpson Stapleton Fires and Newby LLP law firm; and S. Lawrence Prendergast is a member of the Board of Advisors of Grace & Co. Consultancy, Inc. and is Chairman of the Turrell Fund. A version of this article previously was published in the American Bar Association’s Business Law Today. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. The authors’ article follows. Continue Reading Guest Post: Stress Testing Your Corporate Governance Structure

One of the most substantial securities litigation phenomena so far in 2021 has been the rising tide of securities litigation relating to SPACs and SPAC-acquired companies. In the latest example of this type of lawsuit, a plaintiff shareholder has filed a securities class action complaint against Owlet, Inc., a company that sells baby health products and that was in July 2021 merged with a SPAC. The defendants named in the lawsuit include not only officers of Owlet itself but also include certain former directors and officers of the SPAC. A copy of the November 17, 2021 complaint against Owlet can be found here. Continue Reading Post-SPAC-Merger Baby Product Company Hit with SPAC-Related Securities Suit

According to the latest report from the NYU Pollack Center for Law & Business in conjunction with Cornerstone Research, SEC Enforcement Activity against publicly traded companies and their subsidiaries declined in fiscal year 2021 (which ended on September 30, 2021) relative to recent years as well as relative to fiscal year 2020. Monetary recoveries were in aggregate greater in FY 2021 relative to FY 2020. The report, entitled “SEC Enforcement Activity: Public Companies and Subsidiaries: Fiscal Year 2021 Update” can be found here. Cornerstone Research’s November 17, 2021 press release about the report can be found here. Continue Reading Public Company SEC Enforcement Activity Declined in FY 2021